AEC Poses Serious Challenges for Indonesia, PPATK Official Says
19 October 2018 19:24 WIB
TEMPO.CO, Jakarta - Deputy Chief of the Financial Transaction Reports and Analysis Center (PPATK) Agus Santoso, said that Indonesia's ascension into the ASEAN Economic Community (AEC) on January 1, 2015, will pose many serious challenges to the new administration. "There are a number of fundamental issues that need to be looked into and prepared prior to joining the AEC," said Agus to Tempo on Wednesday, August 27, 2014.
With the realization of the principles of free movement of people and capital under the AEC, corruption suspects will have a better chance of escaping prosecution with their ill-gotten wealth to neighbouring countries, especially given the differences in the law regimes in the region. Indonesia adheres to the Continental Law principles, whereas many of Indonesia's neighbours uses the Common Law principles. The discrepancies may potentially spark legal disputes, which could be abused by foresighted corruption suspects to escape prosecution.
"The condition poses a tough challenge for law enforcement agencies to prevent the flight of ill-gotten wealth. Worse still, it complicates the process of asset recovery," said Agus.
He also urges the government to complete the administrative process for e-KTP prior to the establishment of the AEC, in order to better protect Indonesia from foreigners that wishes to use Indonesia as a base for criminal activities, such as establishing a terrorist network, drug smuggling, human trafficking, illegal logging and/or mining.
According to PPATK, another important matter that Indonesia needs to be prepared to push for is the move towards a 'cashless society', as it helps to prevent the circulation and distribution of counterfeit bank notes.
Indonesia's land ownership certification procedures also needs to be perfected, as many investors in Indonesia still prefer to keep their investments in the form of land ownership. Proper land ownership certification and survey could prevent land purchases from being used as a mean for money-laundering.
"Bank Indonesia (BI) also needs to watch out for the physical movements of foreign currencies, both in and out of Indonesia," said Agus. Proper customs and excise procedures needs to be implemented to assist in preventing frauds and money laundering.
PPATK is currently preparing a framework for National Risk Assessment (NSA) to map the risk that AEC poses towards Indonesia's financial system. "We hope to finish it before the end of the year," he said.
MARIA YUNIAR